Two Sick Men, One Cane

Talk of a GM and Chrysler merger is heating up, the premise being that somehow two companies gasping for breath will be able to keep going a little longer if they hold on tightly to each other. Still no thoughts out there about what the industrial Midwest will look like as the US automotive industry keeps shrinking. As in every election cycle, the troubled Midwest is at center stage for about three months. A story I wrote for The Big Money a couple of weeks ago seems even more relevant now. I wrote then:

Courted by both parties at election time, it is the union voters in these states who, in cycle after cycle, have found themselves ignored once the vote is over. Their situation becomes increasingly untenable. The average pay of a man 45 to 54 years old with an hourly wage job is $2 an hour higher than the pay of a 25- to 34-year-old was 20 years ago. And it is the same man: In 20 years, he has had a raise of $2 an hour. And if his son has a similar job, he makes less than the father did two decades back.

Underlying the culture gap between the coasts and the center is an increasing economic gap. As the economic climate in places like Michigan, Ohio, and Pennsylvania becomes increasingly moribund, it makes companies ever less willing to locate there, creating a vicious cycle of economic decline. The question isn't how to bail out GM, Ford, and Chrysler. It's how to bail out the entire mid-20th century industrial economy they used to support.